Jeffersonville Business Owner Ordered To Pay In Fraud Case - NBC4: Columbus, Ohio News, Weather, and Sports (WCMH-TV)

Jeffersonville Business Owner Ordered To Pay In Fraud Case

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A Fayette County man was sentenced to 12 months and one day in prison after he pleaded guilty to attempting to evade and defeat the payment of employment taxes due and owing to the IRS. 

Charles E. Watts, Jr., 45, of Jeffersonville, was accused of failing to pay delinquent employment taxes.

According to court documents, between 1998 and 2008 Watts was the owner and operator of Dimensional Construction, T&R Electric Works, Watts Electric Co., Watts Electric Company of Ohio, LLC, and Valley Construction & Property, Inc.  These companies were largely the same company and were located in the vicinity of Jeffersonville, Ohio.

During the 10 year period, the IRS Collection Division made numerous attempts to collect delinquent employment taxes from Watts and his businesses.

Watts made several promises to pay the IRS, but failed to do so, according to court documents. He also failed to disclose his personal and business financial information on IRS Collections Information Statements submitted to the IRS Collection officers.

Watts was also accused of making false statements on Employment Tax Returns submitted to the IRS.

During 2004, Watts evaded paying employment taxes by establishing a business name, operating under that name, incurring employment tax obligations, then terminating the business only to establish another one under a different name and Employer Identification Number.  Watts opened several business bank accounts utilizing these various business names, and used those accounts to funnel employees' withholdings from account to account in order to elude IRS Collections' efforts, according to court documents.

Watts also established a shell company, Valley Construction & Property, Inc., and opened a bank account in its name for the sole purpose of shielding reported and unreported business receipts from the IRS.  Watts used the Valley Construction & Property, Inc. bank account to pay personal living expenses and to purchase major assets.  Watts placed multiple assets in the name of Valley Construction & Property, Inc. in order to disguise the fact that he was the true owner of these assets.

In addition, Watts recruited several individuals who helped him conceal various assets from the IRS by placing them in their own name.  These assets included real estate, luxury vehicles, and a pleasure boat.

Watts evaded employment taxes in the amount of $1,443,048.96 for twelve employment tax periods beginning in the fourth quarter of 2004.  Of this amount, $634,778.67 accounts for money Watts withheld from his employees, but failed to pay over to the IRS.  Instead of paying over the withheld employment taxes, including his portion of tax, Watts used a substantial portion of the funds to purchase numerous assets (as described above) and to support frequent gambling trips, travel to resort hotels, and to purchase jewelry.

Following his incarceration, Watts will have three years of supervised release. He was also ordered to pay $1,443,048.96 in restitution.

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